Page 94 - International Marketing

NPP

96 International Marketing BRILLIANT'S

Against additional licenses, export houses can also import spares.
The spares so imported by the export houses can be sold to any person.
Under this facility the CIF value of the total imports of spares shall not
exceed ` 2 Lakh. For export houses with export turnover of ` 5 crores.
(FOB) or more for select products in the preceding financial year or export
houses recording, a growth rate of at least 50% in preceding year subject
to thus exports of selected products in the year, before the preceding year
is at least ` 4 crores, the celling limit for import of spares will be ` 5 lakhs.
Export houses with annual export performance of not less than ` 7
crores will be allowed IRMAC facilities for supply of raw material and com-
ponents to actual users off the shelf against valid import licenses held by
them. This facility will also be allowed to Export Houses showing in 1984-
85 a minimum growth of 50% in their export of select products subject to
their exports of select products being at least ` 4 crores in 1983-84.
An export house may be allowed to utlize foreign exchange up to 2.5%
of the FOB value of its total exports in 1984-85 for the following purpose:
(a) Foreign exchange expenditure on promotional activities permit-
ted under the code of grants-in-aid for export effort;
(b) Import of testing instruments and equipment for packing and tag-
ging and their spares duty cleared from indigenous angle and
required for setting up common service centres.
The above limit of 2.5% will be subject to a maximum of ` 10 lakhs
and any amount in excess thereof shall be adjusted against the REP
entitlement of the export house on its own exports. The upper limit of ` 10
lakh will be ` 20 lakh for export houses with minimum exports of select
products of ` 5 crores in 1984-85.
Disadvantages
The use of export house allows individual companies to gain wider
exposure of their products in foreign markets at much lower costs than
they could achieve on their own. But, there are a number of disadvantages
also. They are as follows:
(a) The export house may specialize by geographical area, product
or customer type. It may not coincide with the supplier’s
objectives. So, the selection of markets may be made on the
basis of what is best for the export houses rather than for the
manufacturer.
(b) Export houses are paid commission for concentration on product
and its sale, rather than for achieving customer satisfaction or
long-term success.